Employment Law: Who owns our social media contacts?

16/02/2012

With today’s array of modern communication, we now find ourselves building relationships and creating contacts on so many different platforms and channels – social media delivers once again on its pledge to influence every aspect of our lives, both personal and professional. We are creating cyber lives for ourselves with “friends”, “connections” and “followers”. But how much do we really know about the implications of our online lives? Personally, social media is another means of keeping in touch with friends and loved ones, often on a daily basis. Professionally, we hope to raise new business in the “real world” from connections confirmed online. But this new means of connecting with one another raises a looming question for professional relationships in employment law: who owns our social media contacts?

This is a particularly interesting area which employers and employees alike should watch out for over the coming months and years. Employees today lead online lives, creating contacts and a persona in cyberspace. But where does that online life cross the line from personal to professional? And can an employer lay claim to their employee’s social media contacts in the way that employers used to create hard-copy customer lists and databases?

Any contention or concern over an employee’s contacts will only realistically arise at the outset or termination of an employment relationship. Employers will want to know how they can protect their employees from walking away with customer lists and, similarly, whether their new recruit can bring any good contacts with them from their old job. The traditional means of navigating this area of the employment relationship is, of course, the restrictive covenant. Restrictive covenants generally set out time-frames during which the employee must not solicit or endeavour to entice away the business of a customer from their previous employer.

Restrictive covenants (primarily, their validity) have been the subject of many a dispute between employers and ex-employees. These disputes tend to arise where the employer discovers that an ex-employee is seeking to utilise contacts gained during the course of their previous employment. Traditionally, those contacts were on customer lists and databases held by the company. For ex-employees to have access to those contacts, they would have to take the print-out of the Excel spreadsheet or the Outlook address book. However, today employees are building their own networks and contact lists on social media, in particular on LinkedIn and, perhaps to a lesser extent, Twitter. The employee need do nothing more in order to take those online contact details with them when moving to a new job. So what is to stop employees using those details? Who owns the employee’s social media contacts? Is it the employee himself? Or their previous employer?

This could be highly relevant in a recruitment context where the employer is vetting a candidate online, particularly using business-orientated social media websites such as LinkedIn. Part of that online vetting process may involve identifying the candidate’s contacts and assessing their ability to carry those contacts over into their new role within the recruiting business. Using social media to vet candidates’ contacts in this way seems, on the face of it, to be a very helpful tool. Clearly it is good to know if a candidate could bring new business through their contacts. However, the risk arises here for employers where a business selects a candidate partly on the basis of their extensive LinkedIn “connections” list, only to find that, when the candidate arrives to start work, their previous employer has required the individual to delete all those connections on leaving their previous employment. A cleverly worded restrictive covenant could purport to ascribe the employee’s online connections to their previous employer, rendering those connections useless going forward. But could it? Restrictive covenants are notoriously difficult to enforce. What is there to stop an employee from re-connecting online with all their contacts once they have started their new job?

This particular issue is yet to be tackled by the courts. At its heart is the question of ownership of contacts, and whether such contacts were obtained during the course of the employment relationship. Much will depend on the wording of the employee’s contract of employment and, in particular, any restrictive covenants contained within.

One of the first social media contacts cases is progressing through the American court system at present. The US company PhoneDog Media has taken a former employee, Noah Kravitz, to court over Twitter followers. Mr Kravitz was a blogger for the company under the Twitter account name @PhoneDog_Noah. On leaving employment, Mr Kravitz changed his Twitter account to @noahkravitz and consequently took his 17,000 Twitter followers with him. PhoneDog are alleging that he has stolen their customers, which the company values at $2.50 each per month. A judge in South Carolina has ruled that the case can proceed on the basis that the Twitter followers equated to a customer list. We are not privy to any information on whether Mr Kravitz and PhoneDog agreed the purpose of the Twitter account before it was opened, nor whether Mr Kravitz had any restrictive covenants in his contract of employment. However, this should highlight to employers the importance of setting the boundaries with employees. If an employer asks employees to “tweet” in their own name on behalf of the business, the employer should clearly set out the purpose of that Twitter account to ensure it is for business use only and, consequently, any followers obtained on the account will belong to the business and not the employee him or herself. Such restrictions could be included in the company’s “social media policy” governing use of social media at work.

It’s safe to say that, at present, very few employers’ contracts and policies are up to speed with today’s social media world, having been drafted before the rise of LinkedIn as an everyday business tool. As noted, employers should implement a social media policy delineating the boundaries of employees’ use of social media. This will ensure that employees are aware of the relevance and possible consequences of their online actions. In addition to a social media policy, employers are well-advised to review their contracts of employment and perhaps implement updated restrictive covenant clauses in line with modern day online communication with clients and customers. Today’s restrictive covenant may require the definition of a “customer” to include “any firm, company or person who, during the X months before termination, was a customer or prospective customer of the company with whom the employee had contact or about whom he became aware or informed in the course of his employment, including any contact (direct or otherwise) through any online social media platform (including but not limited to LinkedIn, Twitter, Facebook and Google+).” However, the validity of such a clause remains to be tested in the courts not least because of the practical difficulties presented in assessing how the departing employee came to be “connected” with each of their 1000+ LinkedIn contacts.

Of course amending restrictive covenants, of itself, may present problems in requiring a variation of the terms of existing employees’ contracts. Existing employees are unlikely to willingly agree to the impositions of more stringent restrictive covenants. However, it may be necessary to adopt the difficult path of variation of terms in order that employers adequately protect themselves and their client list should their employees choose to move on to pastures new.

It will be easier to impose social media-orientated restrictive covenants on new recruits, as this is likely to become the norm in contracts of employment in the coming years. Once the new recruit starts work, they may be inclined to update their LinkedIn profile to let all their “connections” know about their new job. However, we would issue a note of caution here which businesses should echo to new recruits – changing employment status on LinkedIn could be a breach of restrictive covenants. Even without particular reference to modern day online contacts, existing restrictive covenants may be strong enough to prevent the employee from even letting their online contacts know of their move. Aside from anything else, such action may draw a business’ attention to attempts by an old employee to utilise their social media contacts’ list in their new job. In a time of possible double-dip recession and limited economic growth, businesses are unsurprisingly particularly keen to protect their client and customer base. We are increasingly seeing evidence of this through a growing number of actions raised or threatened against ex-employees for breaching their restrictive covenants in their new jobs. Attempting to use a new recruit’s social media contacts therefore also presents employers with the risk of becoming embroiled in court actions which, ultimately, may prevent their new employee from working at all pending satisfaction of restrictive covenants.

In short, this area of “social media law” is developing a-pace with the changes in modern professional life and will no doubt require judicial guidance to settle some of the many new questions for both employers and employees. In the meantime, perhaps the next time you invite someone to “connect” with you on LinkedIn, your invitation should be a little more detailed…“Dear new social media contact, I’d like to connect with you… because I met you outside of work in a social context and you do not have any connection with, relevance to or potential custom relative to my employment with X company. I look forward to connecting with you personally, not professionally, in the future.”  Could it be that you are suddenly longing for the bygone age of exchanging business cards and compiling hard copy customer lists? We certainly are!

For further advice relating to social media and Employment Law please contact Robert Holland.